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People gather in front of a road damaged by heavy monsoon rains in Madyan, Pakistan on August 27, 2022.

People walk past a road damaged by heavy monsoon rains in Madyan, Pakistan on August 27, 2022. (Photo: Abdul Majeed/AFP via Getty Images)

'Who Will Be Next?' Denmark Becomes First UN Member to Pledge 'Loss and Damage' Funds

"After a year of escalating climate disasters, this is an important signal from Denmark that the issue of loss and damage finance is being taken seriously," said one advocate.

Kenny Stancil

Denmark on Tuesday became the first member of the United Nations to pledge "loss and damage" funding that aims to compensate developing countries for the destruction being wrought by the fossil fuel-driven climate crisis the world's poor played little role in creating.

"It is grossly unfair that the world's poorest should suffer the most from the consequences of climate change, to which they have contributed the least."

After U.N. Secretary-General António Guterres urged governments to tax Big Oil's windfall profits and use the revenue to assist people enduring the devastating consequences of the worsening climate emergency during his opening remarks at the General Assembly, Denmark announced that it will allocate roughly $13 million to Africa's Sahel region and other vulnerable areas hard-hit by extreme weather disasters.

Although this paltry sum pales in comparison to the more than $5 trillion in unpaid damages that fossil fuels are estimated to cause each year, advocates welcomed the landmark announcement and expressed hope that other wealthy countries most responsible for greenhouse gas pollution will follow suit.

"Who will be next?" the Loss and Damage Collaboration—a group of more than 100 researchers, activists, and policymakers from around the globe—asked on Twitter.

Danish Development Minister Flemming Møller Mortensen said in a statement that the pledge was inspired by his spring visit to flood-ravaged parts of Bangladesh.

"It is grossly unfair that the world's poorest should suffer the most from the consequences of climate change, to which they have contributed the least," he said.

Denmark's announcement comes as lives are being cut short and tens of billions of dollars in losses and damages are mounting amid several catastrophes driven by climate chaos and inequality, from the drought-fueled famine in East Africa to the deadly floods in Pakistan to Hurricane Fiona, which has battered Puerto Rico and the Dominican Republic.

Teresa Anderson, global lead on climate justice at Action Aid International, wrote on social media that "after a year of escalating climate disasters, this is an important signal from Denmark that the issue of loss and damage funding is being taken seriously."

She added that diplomats at the U.N.'s upcoming COP27 climate conference in Egypt "must agree [on] a new loss and damage funding facility to channel much-needed funds in a transparent and multilateral manner."

These points were echoed by the Loss and Damage Collaboration, which stated that if such a dedicated funding mechanism is not established at COP27 in November, "we will not be able to deliver the trillions of dollars more that are needed to support those on the front lines of the climate crisis."

As the Washington Post noted: "Loss and damage funding has long been a rallying cry for climate justice advocates and leaders from vulnerable countries. Wealthy nations, including the United States, have rebuffed those calls, worried that any kind of financial commitment would imply legal liability for climate change's escalating toll."

Earlier this month, more than 400 groups signed Climate Action Network's letter imploring COP27 delegates to ensure that finance for climate-related losses and damages is added to the conference agenda.

During last year's COP26 meeting in Glasgow, Scotland committed just over $2 million to loss and damage funding, becoming the first government to do so. Scotland—which is a constituent country of the United Kingdom and therefore not a U.N. member—was followed by Wallonia, a French-speaking region of Belgium that earmarked about $1 million for the cause.

However, negotiators "failed to secure the establishment of a dedicated new damages fund vulnerable nations had pushed for earlier in the summit," Reuters reported at the close of the event, due to "resistance from the United States, the European Union, and some other rich nations."

Denmark's newly announced investment "includes 40 million Danish kroner—about $5.4 million—to work with civil society groups on addressing loss and damage," the Post reported. "It also sets aside millions for 'strategic efforts' around loss and damage negotiations ahead of the upcoming talks in Egypt."

Although Denmark's commitment is the largest to date, critics warn that it falls far short of what's needed and is structured in a way that could enrich private insurers at the expense of those most in need.

As the Post explained:

Harjeet Singh, head of global political strategy at the nonprofit Climate Action Network, called Denmark's pledge "significant." But he pointed out that about a third of the promised funding will go to the InsuResilience Global Partnership, a U.N.-organized program through which private companies provide disaster insurance to those most vulnerable from climate change.

This setup "will create business for European corporations in the developing countries, eventually making vulnerable people pay for the premium toward losses and damages from climate disasters," Singh said.

Global climate justice advocates, meanwhile, have declared Thursday "Loss and Damage Action Day."

In a blog post published Wednesday, Rachel Cleetus, policy director for the Climate and Energy Program at the Union of Concerned Scientists, argued that "it's past time for the U.S. and other rich nations to acknowledge the terrible, unjust burden they are imposing on communities in low-income, climate-vulnerable countries and fully own their responsibility to address the problem."

"The responsibility of richer nations like the United States is clear: the U.S. alone is responsible for almost a quarter of the heat-trapping emissions fueling climate change, on a cumulative basis," Cleetus wrote. "Meanwhile, it is people in low-income countries like Pakistan, Somalia, Peru, and Vanuatu, who have emitted a minuscule amount of CO2, who are bearing the brunt of extreme disasters."

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